Brazil Startup Success Points at Latin America Cryptocurrency Takeoff

Innovative technology is driving increasing interest in cryptocurrency and could allow Brazilian tech startups to leap frog other nations in the digital currency space.

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Innovative technology is driving increasing interest in cryptocurrency and could allow Brazilian tech startups to leap frog other nations in the digital currency space.

Prosperity Coins

Combining the worlds of crowdfunding, cryptocurrency, and the idea of profit sharing with users, Brazilian start-up Prosperity Games is blazing a new trail in the crypto world with the creation of a new alt-coin in conjunction with a new gaming title.

Not only will the sale of Prosperity Coins fund the development of the new turn-based battle game Full Metal Wars, but these tokens will then go on to also become the in-game currency, whilst also offering a profit dividend to those holding them, based on the financial success of the game itself.

Allowing users to invest in a new gaming title is not new in itself, but the idea that the excitement and support a user can offer to a new game translates into a financial stake in the game's success is clearly a motivating feature.

South America, a continent with a population of 387 million, has so far played a quiet role in the development of the global cryptocurrency ecosystem. Despite having huge segments of society being under-banked, bitcoin and similar cryptocurrencies have failed to take off.

Latin America’s ‘Silicon Valley’

However, now with a growing tech scene and area likes Campina Grande being dubbed the “Silicon Valley of South America,” innovative crypto solutions are beginning to emerge from the region. In the case of Brazil's 200 million citizens, one motivating factor is the instability of the nation's fiat currency the Real (BRL) and historically high levels of foreign currency taxation, which sat at 6% until the state dropped the rate last year in an attempt to increase foreign-direct-investment into the country.

Last October Cointelegraph spoke to Alberto Vega the regional representative of BitPay, about the potential he sees in Brazil as its citizens become more involved in the digital currency world.

“Latin America accounts for 170 million underbanked or unbanked, which is a valuable segment for e-payments. […] Bitcoin in Brazil is gaining volume and momentum while more and more companies start accepting Bitcoin. Companies like Bitpay, Mercadobitcoin, Bitinvest and Bitcointoyou are working the great opportunities this rising market offers.”

These “un-” and “under-banked” individuals could be ideal users of cryptocurrencies and the potential demand is driving increasing interest from developers. Back in Brazil, the Prosperity Coin funding plan for the game is being run by crypto-asset underwriting service Lamb&Cooper. Speaking to their Chief Adviser, Miklos Kadar, we asked if the regulatory environment in Brazil was also now driving the growth of the domestic crypto sector. Kadar replied:

“The Brazilian crypto regulatory environment is similar to the US' approach by the IRS. In Brazil Receita Federal regards crypto assets as financial assets that are subject of capital gains (by 15% tax imposed) with one big difference from the US, there is no tax for any gains coming from closed crypto asset positions below BRL R$35 000, around US$11-14 000.”

Keeping the Brazilian focus, the underwriters are also currently offering a special deal for users making use of the Rippex Ripple gateway. Founded in 2014, the exchange has already become the country's largest Ripple portal.

Those purchasing Prosperity Coins through the Rippex platform will be given access to the closed beta testing group of Full Metal Wars whilst the team negotiates a distribution deal with a major international publisher.

Miguel Oliveira, the game's designer and CEO of Prosperity Games, explains how this local focus and pride of the team's origin in Campina Grande has benefited them in recruiting talent for the art development of the game.

"I am a great fan of Marvel characters. Mike Deodato is from Prosperity Games's city, Campina Grande, Brazil, and he is a renowned artist of Marvel and a celebrity in Brazil. So, I talked to him, about some contribution. Mike asked permission from Marvel who accepted his involvement so Deodato created many awesome characters for Full Metal Wars."

Conclusion

By drawing on a growing local crypto scene for their support, companies like Prosperity Games are able to benefit both from international interest in innovative crypto technologies, whilst also harnessing the power of a growing domestic interest in the technology.

In a recent Cointelegraph interview, Marcelo Miranda founder of the recently launched Brazilian exchange FlowBTC explained how he saw an increasing Brazilian interest in Bitcoin would affect its position within the global market.

“Brazil is the 7th largest economy in the world and as people become more aware of Bitcoin, we will naturally take the lead regionally. The number of initiatives and new ventures that are popping up every day in Brazil proves this point.”

The previously slow adoption rates for cryptocurrencies in the region could now become beneficial as new users discover more professional, honed, and tested services compared to similar kludgy offerings of two years ago. With local projects such as the profit sharing available through the Prosperity Coin investment in Full Metal Wars, the FlowBTC exchange, just to name a few, many more Brazilians and South Americans are likely to get involved in the world of cryptocurrency.

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